Jussi Nyrhinen
JYU DISSERTATIONS 230
Social Capital in the
Digitised Servicescape
Jussi Nyrhinen
Social Capital in the Digitised Servicescape
Esitetään Jyväskylän yliopiston kauppakorkeakoulun suostumuksella julkisesti tarkastettavaksi kesäkuun 4. päivänä 2020 kello 12.
Academic dissertation to be publicly discussed, by permission of the Jyväskylä University School of Business and Economics
on June 4, 2020 at 12 o’clock noon.
JYVÄSKYLÄ 2020
Editors Tuomo Takala
Jyväskylä University School of Business and Economics Timo Hautala
Open Science Centre, University of Jyväskylä
ISBN 978-951-39-8181-5 (PDF) URN:ISBN:978-951-39-8181-5 ISSN 2489-9003
Copyright © 2020, by University of Jyväskylä
Permanent link to this publication: http://urn.fi/URN:ISBN:978-951-39-8181-5
Nyrhinen, Jussi Olavi
Social Capital in the Digitised Servicescape
Jyväskylä: University of Jyväskylä, 2020, 81 p. (+ original papers) (JYU Dissertations
ISSN 2489-9003; 230)
ISBN 978-951-39-8181-5 (PDF)
Digitalisation has placed retail stores under re-examination due to the changing servicescape (i.e. the shopping environment) and social interactions with store personnel and other customers that are experienced across both online and offline stores. This interdisciplinary dissertation seeks to fill a research gap in the marketing literature concerning the servicescape and the sociological theory of social capital, including how interpersonal relationships and social networks constitute the service experience and how the digital–physical servicescape facilitates trust, human contact and communities. The research, which applies both qualitative and quantitative methods, seeks to provide a holistic picture of customer experience creation in the digitalised servicescape. This study was conducted in three phases, which were published in separate papers and are included in this dissertation. The quantitative studies utilised consumer surveys that were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) for testing the hypothesised associations between examined constructs. Quantitative studies were completed via a content analysis of focus group interviews. The findings of this dissertation illustrate how retail stores serve as a setting for networks of non-commercial exchange and how social interaction can be an end in itself for consumers who visit them. The combination of online and offline stores facilitates social capital formation by providing a platform for a broader variety of human contact and social networks than what a single channel could offer. In this digital–physical servicescape channel, integration enhances the co-creation of the service experience by providing convenient access to social resources. The affective state of the service experience is especially associated with trust and commitment towards the relationship with the retailer. This study has implications for both retailers and service providers who aim to diversify and develop lasting customer relations in a digitised consumer society.
Keywords: channel integration, digital marketing, consumer behaviour, customer experience, omnichannel retailing, servicescape, social capital
TIIVISTELMÄ (SUMMARY IN FINNISH)
Sosiaalinen pääoma digitalisoituneessa palvelumaisemassa
Digitalisaatio on asettanut asiakaskokemuksen uudelleentarkasteltavaksi, koska palvelumaisema eli vuorovaikutus ja tila koetaan sekä fyysisesti myymälässä että digitaalisesti verkkokaupassa. Väitöskirja tutkii ihmisten välisten suhteiden ja so- siaalisten verkostojen eli sosiaalisen pääoman merkitystä asiakaskokemukselle:
kuinka monikanavainen palvelumaisema tukee luottamusta, ihmiskontakteja ja asiakasyhteisöjä. Tutkimus pyrkii näin tarkastelemaan, kuinka asiakkaat rakentavat palvelukokemuksen vuorovaikutuksessa keskenään ja henkilökunnan kanssa hyö- dyntäen sekä digitaalista että fyysistä kanavaa. Tämä kulutustutkimusta edustava väitöskirja on tieteidenvälinen: asiakaskokemuksen tutkimus kuuluu markki- noinnin tieteeseen ja sosiaalinen pääoma edustaa sosiologian teoriaa. Väitöstyön tuloksena syntyy uutta tutkimustietoa asiakaskokemuksen muodostumisesta digi- fyysisessä palvelumaisemassa halki myymälätilan ja verkkokaupan. Tutkimuksen tulokset auttavat ymmärtämään, kuinka tämä dynamiikka vaikuttaa etenkin tunne- pohjaiseen kokemukseen ja johtaa sitä kautta mahdollisesti luottamukseen ja kestä- viin asiakassuhteisiin. Tunteiden ja luottamuksen muodostumisen ymmärtäminen on tärkeää, koska myyjän etäisyydestä johtuva epävarmuus on edelleen yksi verk- kokaupan suurimpia haasteita. Lisäksi asiakasuskollisuus verkkokauppoja kohtaan on usein heikko, koska ostaminen perustuu usein näennäisesti rationaalisten teki- jöiden vertailuun. Täten tutkimuksen löydösten valossa tarkastellaan sosiaalisia te- kijöitä kauppojen kilpailukeinona ja pohditaan fyysisten myymälöiden merkitystä digitalisoituneessa kaupassa. Väitöstyö yhdistää laadullisia ja määrällisiä menetel- miä: monimenetelmällisen tutkimuksen tarkoitus on tuottaa holistinen kuva asia- kaskokemuksen muodostumisesta digitalisoituneessa palvelumaisemassa. Tutki- mus toteutettiin kolmessa vaiheessa, jotka on esitetty tämän väitöskirjan kolmessa osajulkaisussa. Kvantitatiiviset kuluttajakyselyaineistot analysoitiin käyttäen osittai- sen pienimmän neliösumman regressio-rakenneyhtälömallinnusta (PLS SEM), jolla testattiin teoriaa käsitteiden välisistä yhteyksistä. Laadullisessa tutkimuksessa teh- tiin sisältöanalyysi fokusryhmähaastatteluaineistolle. Tutkimuksen tulokset osoit- tavat, että vähittäiskaupat ovat myös alusta yhteisöille ja sosiaaliset kontaktit itses- sään voivat olla syy kaupassa käymiselle. Verkko- ja kivijalkakaupan yhdistelmä edistää sosiaalisen pääoman muodostumista tarjoamalla puitteet monimuotoi- semmalle vuorovaikutukselle ja sosiaalisille verkostoille, kuin nämä kanavat yksi- nään voisivat tarjota. Monikanavaisessa palvelumaisemassa kanavien yhteen- sovittaminen vahvistaa sekä asiakkaiden keskinäistä että henkilöstön ja asiakkaiden välistä vuorovaikutusta ja edistää näin palvelukokemuksen yhteisluomista. Vuoro- vaikutus palvelumaisemassa vaikuttaa etenkin tunnepohjaisen asiakaskokemuksen muodostumiseen, joka johtaa luottamukseen ja sitoutumiseen vähittäiskaupan kanssa vastavuoroiseen suhteeseen. Tutkimuksen johtopäätökset palvelevat kauppoja ja palveluntuottajia, jotka pyrkivät erottumaan kilpailijoistaan palvelulla ja kehittämään kestäviä suhteita digitalisoituneessa kuluttajayhteiskunnassa.
Author’s address Jussi Nyrhinen
Department of Social Sciences and Philosophy University of Jyväskylä
P.O. Box 35, FI-40014 University of Jyväskylä
Jyväskylä, Finland
jussi.nyrhinen@jyu.fi
Supervisors Professor Outi Uusitalo
School of Business and Economics University of Jyväskylä
Professor Terhi-Anna Wilska
Department of Social Sciences and Philosophy University of Jyväskylä
Reviewers Professor Lasse Mitronen Aalto University
Professor Jonathan Reynolds University of Oxford
Opponent Professor Lasse Mitronen
Aalto University
ACKNOWLEDGEMENTS
This dissertation is based on the findings of the research projects I was privileged to take part at the Jyväskylä University School of Business and Economics and University of Jyväskylä Department of Social Sciences and Philosophy. I express my sincere gratitude to the people whose support and contributions made this dissertation possible. First, I am deeply grateful for my supervisors—Professors Outi Uusitalo and Terhi-Anna Wilska—for supporting and guiding me through the dissertation process. Specifically, Professor Outi Uusitalo introduced me to the qualitative research method and mentored me during the writing process, while Professor Terhi-Anna Wilska guided me with the theory of sociology. In addition, I express my appreciation to the pre-examiners of my doctoral disser- tation—Professors Lasse Mitronen and Jonathan Reynolds—for providing en- couraging and constructive feedback. I especially thank Professor Mitronen for acting as the opponent during my dissertation’s public examination. I also offer special thanks to my co-authors— Professors Outi Uusitalo, Heikki Karjaluoto, Mika Skippari, Markus Blut and Chanaka Jayawardhena—for their contributions and valuable comments. Notably, Professor Heikki Karjaluoto introduced me to structural equation modelling, and Adjunct Professor Mika Skippari commented on my manuscript and helped me ignite the first paper that stemmed the idea for my dissertation work. Furthermore, I offer many thanks to my colleagues at the Jyväskylä University School of Business and Economics and people in other or- ganisations I had the pleasure to work with during my dissertation. My special thanks go to Research Director Doctor Richard Cuthbertson and Olli Rusanen, Master of Science, who provided valuable support and commented on my man- uscript during the joint research project between University of Oxford, Aalto University and University of Jyväskylä. This dissertation is based on research funded by Business Finland—the Funding Agency for Technology and Innova- tions, the European Agricultural Fund for Rural Development (European Union), the Centre for Economic Development, Transport and the Environment in Fin- land, the Strategic Research Council (SRC) at the Academy of Finland (#327237), the Finnish Foundation for Economic Education, the Finnish Commerce Federa- tion, the Finnish Grocery Trade Association, the Finnish Research Foundation of Retail Trade, and the Jyväskylä University School of Business and Economics.
Their support is gratefully acknowledged. Finally, I express my gratitude to my friends and family for supporting and encouraging me through the dissertation process.
FIGURES
FIGURE 1 Theoretical Positioning of the Dissertation ... 18
FIGURE 2 Phases of the Study ... 22
FIGURE 3 The Phases of the Customer Experience ... 30
FIGURE 4 The Realms of Experience in a Blended Servicescape ... 35
FIGURE 6 The Conceptual Framework of Social Capital in the Servicescape ... 49
FIGURE 7 Conceptual Model for Paper I ... 56
FIGURE 8 Conceptual Model for Paper II ... 58
FIGURE 9 Conceptual Model for Paper III ... 60
FIGURE 10 Linkages between the Servicescape and Social Capital Outcomes ... 65
TABLES TABLE 1 The Author’s Contribution in Individual Papers in this Dissertation ... 20
TABLE 2 The Research Structure ... 23
TABLE 3 The Main Conceptualisations of the Customer Experience ... 26
TABLE 4 The Main Dimensions of the Customer Experience ... 28
TABLE 5 The Dimensions and Components of the Servicescape ... 32
TABLE 6 The Staging and Clues Regarding the Servicescape ... 32
TABLE 7 The Views on Social Capital ... 38
TABLE 8 Social Capital Outcomes in Retail ... 41
TABLE 9 The Types of Social Capital in the Servicescape ... 47
TABLE 10 Hypotheses for Paper I ... 56
TABLE 11 Hypotheses for Paper III ... 59
TABLE 12 Summary of the Answer to the Research Question ... 63
CONTENTS
ABSTRACT
ACKNOWLEDGEMENTS FIGURES AND TABLES CONTENTS
LIST OF ORIGINAL PUBLICATIONS ABBREVIATIONS
1 INTRODUCTION ... 13
1.1 Background ... 13
1.2 Aims of the Study and the Research Questions ... 17
1.3 The Research Process and the Study’s Outline ... 19
2 THEORETICAL FOUNDATIONS ... 24
2.1 The Customer Experience ... 24
2.1.1 The Concept of the Customer Experience ... 24
2.1.2 A Multidimensional View of the Customer Experience ... 26
2.1.3 From the Single-Channel to the Omnichannel Experience ... 28
2.1.4 The Customer Experience as a Sequence of Events ... 29
2.2 The Servicescape: The Setting for the Customer Experience ... 30
2.2.1 The Servicescape as an entirety of the physical, digital and social spaces ... 30
2.2.2 People in the Servicescape Co-Create the Customer Experience ... 33
2.3 Social Capital in Retail ... 35
2.3.1 Defining Social Capital ... 35
2.3.2 The Manifestation of Social Capital in the Retail Trade ... 39
2.3.3 The Impact of Digitalisation on Social Capital ... 41
2.4 Social Capital in Relation to the Servicescape ... 43
2.4.1 Social Capital in the Co-creation of the Service Experience ... 43
2.4.2 Social Capital as an Outcome of the Service Experience ... 45
2.5 Summary of the Theoretical Foundations ... 47
3 RESEARCH DESIGN ... 50
3.1 Scientific Paradigm: Critical Realism ... 50
3.2 Multimethodological Study ... 52
3.2.1 The Quantitative Research Strategy: The Survey Instrument ... 53
3.2.2 The Qualitative Research Strategy: Focus Group Interviews ... 54
4 PUBLICATION SUMMARIES ... 55
4.1 Publication I: ‘The impact of consumer local engagement on local store patronage and customer satisfaction’ ... 55
4.2 Publication II: ‘How does the digitalisation of servicescape
shape the service experience?’ ... 57
4.3 Publication III: ‘The effect of retail service experience on cross- channel customer loyalty’ ... 58
5 CONCLUSIONS AND DISCUSSION ... 62
5.1 Theoretical Contributions ... 62
5.2 Managerial Implications and Relevance of the Research ... 65
5.3 Evaluation of the Study and Future Research Avenues ... 67
REFERENCES ... 69 ORIGINAL PAPERS I–III
LIST OF PUBLICATIONS
This doctoral dissertation is based on the following original publications and manuscripts, which are referred to in the text by their Roman numerals:
I. Skippari, M., Nyrhinen, J., & Karjaluoto, H. (2017). The impact of con- sumer local engagement on local store patronage and customer satisfac- tion. The International Review of Retail, Distribution and Consumer Research, 27(5), 485–501.
Paper I is based on the following:
Skippari, M., Nyrhinen, J., & Karjaluoto, H. (2017, July). The role of consumer local engagement and personal values in explaining local store patronage. Paper presented at the 19th EAERCD, Conference of the European Association for Education and Research in Commercial Distribution, Dublin Institute of Technology, Ireland. Winner of the Best Paper Award in the Consumer Behaviour track.
Skippari, M., Nyrhinen, J., & Karjaluoto, H. (2015, May). Exploring the drivers of local store patronage. Paper presented at the 44th European Marketing Academy Annual Conference, Leuven.
Skippari, M., Nyrhinen, J., & Karjaluoto, H. (2016). The effect of con- sumer local engagement and personal values to local store patron- age. In K. K. Kim (Ed.), Celebrating America’s pastimes: Baseball, hot dogs, apple pie and marketing?. Paper presented at the Proceedings of the 2015 Academy of Marketing Science (AMS) Annual Conference, Denver (pp. 959–963). Berlin, Germany: Springer; Academy of Mar- keting Science.
II. Nyrhinen, J., & Uusitalo, O. (2020, accepted). How does the digitalisation of servicescape shape the service experience?. In R., Cuthbertson & O.
Rusanen (Eds.). Red Queen effect: Strategies for an innovative landscape -Im- plications for management and public policy in a global, digital consumer society.
Oxford, UK: Oxford University Press.
III. Nyrhinen, J., Blut, M., Karjaluoto, H., Uusitalo, O., & Jayawardhena, C.
(2020, Manuscript to be submitted). Omnichannel customer experience:
Testing the interplay between digital and physical servicescape determi- nants.
ABBREVIATIONS
B&M Brick and Mortar. A retail channel existing as a physical building i.e. ‘offline’, particularly a retail store, rather than doing business solely online.
CDL Customer-Dominant Logic. A customer-oriented business and mar- keting logic that focuses on the customer instead of the product or service.
e-store Online Store. A retail channel existing as s website or an application by means of which goods or services are retailed over the Internet, rather than doing business solely offline.
F2F Face-to-face. In this dissertation F2F means two or more people in- teracting in the same physical place, rather than interacting through telecommunication.
PEOU Perceived Ease of Use. In this dissertation PEOU refers to ease/dif- ficulty of shopping online in general.
SOW Share-of-Wallet. Share of a customer’s overall expenditure for a type of product/category that goes to a particular brand/com- pany/channel.
WOM Word-of-Mouth. Any evaluation about a company or its offering that is shared among customers. The definition includes ‘online WOM’, which is WOM shared via the Internet.
1.1 Background
‘In a virtual word, we’ll long for reality even more’ ~ Robert Nozick (1989) The interplay between online and offline stores is altering how consumers expe- rience retail service. Yet, the direction of this change is uncertain, especially re- garding the role of human contact and customer relationships in digitalising re- tail commerce. Although less than 12% of total global retail sales were conducted online in 2018 (Statista, 2019a), online retail sales grew by more than 25% during the years of this research (2014–2018) (Statista, 2019b). However, while the share of online commerce in terms of total global retail sales is expected to continue growing, it will do so at a smaller approximate annual rate of less than 20% (Sta- tista, 2019b). The digitalisation of retailing has lowered entry barriers for new agile competitors that scale up rapidly at a lower cost than retailers with offline business models do, and their returns may grow faster due to obtaining new cus- tomers through their digital capabilities and networks (see e.g. Piotrowicz &
Cuthbertson, 2014). This industry-level disruption has led even established mar- ket leaders with business models that were initially meant for offline retailing to adjust their businesses to these changes, which further accelerates the rate of cus- tomer adoptation of online commerce. This process is facilitating industry-level digitalisation not only among retailers but more crucially among consumers.
The digital disruption of retail trade alters the dynamics among companies and between retailers and consumers. Due to the shift towards digitalisation in the retail trade, consumers are no longer constrained to a geographical location and traditional retail shops because other companies, such as consumer goods, logistics and payment companies, are establishing direct relationships with con- sumers (Treadgold & Reynolds, 2016). Search engines, social media networks,
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price comparison websites and online marketplaces are influencing consumer be- haviour and thus altering the fundamentals of what the act of retailing is, which may even disintermediate some traditional retailers (Leeflang, Verhoef, Dahl- ström, & Freundt, 2014; Treadgold & Reynolds, 2016). These developments have also caused the re-evaluation of customer relationships because increased com- petition and minimal switching costs for consumers are making it increasingly difficult to retain customers (Srinivasan, Anderson, & Ponnalovu 2002; Wallace, Giese, & Johnson, 2004). This factor highlights experiential aspects as potential sources of long-lasting and profitable customer relationships that are differenti- ated by economical or utilitarian factors, such as price, variety and availability, which are increasingly difficult for many companies to achieve.
Regardless of both the rapid digitalisation of the retail industry and the rapid growth of online commerce, 88% of all global retail goods and services are still bought offline (Statista, 2018a). Prior studies have also shown that consumers have various social needs and motives to visit physical (i.e. ‘offline’ or ‘brick-and- mortar’ [B&M]) stores, such as to meet other customers and to speak with store personnel while shopping (Maruyama & Wu, 2014). These needs and motives can be linked to the demand for authenticity and human interaction in a digital- ised consumer society, which means that consumers also seek experiences rather than solely focusing on economic norms and pragmatic motives while shopping (see Novak, Hoffman, & Duhachek, 2003; Wilmott & Nelson, 2003; Yeoman, Brass, & McMahon-Beattie, 2005). Hence, B&M stores serve as places for humans to interact and congregate (Landry, Arnold, & Stark 2005; Pan & Zinkhan 2006) as well as to examine products and to feel the shop’s atmosphere (Piotrowicz &
Cuthbertson, 2014; Verhoef, Neslin, & Vroomen, 2007). Thus, it is important to gain a greater understanding of the role of these social and experiential factors in commerce.
Due to ongoing consumer adoption of online commerce and the need for authenticity and human contact, rather than solely replacing the physical channel, the digital channel is reshaping its purpose (see Treadgold & Reynolds, 2016).
Consumers are also increasingly shopping across multiple channels in different stages of the purchase process, and different channels serve different purposes (Dholakia et al., 2010; Wallace et al., 2004). For instance, a consumer may use a digital channel (i.e. online/mobile store) for information searching, a B&M store for viewing and examining the product, and return to a digital channel to make the purchase (Ansari, Mela, & Neslin, 2008; Kumar & Venkatesan, 2005). The uses of different channels are also affected by customers’ adoption of technologies as well as various lifestyle and socio-demographic factors, such as age, level of ed- ucation, occupation or living area (see e.g. Dholakia et al., 2010). Moreover, use of a channel may vary according to the retail context; thus, customer segments and product categories may even determine the now unclear role of physical stores in the future (Piotrowicz & Cuthbertson, 2014). Digitalisation of the retail trade has not only effaced the borders between industries and created new types of retail businesses but has also altered how ‘traditional’ retail services are con- sumed and experienced; customers now interact with firms through a plethora
of touchpoints over multiple channels and media types, resulting in intricate cus- tomer journeys (Lemon & Verhoef, 2016; Rigby, 2011).
The term ‘omnichannel shoppers’ refers to consumers who fluently switch across both online and offline channels and both desktop and mobile devices within a single transaction process and therefore expect seamless interplay of the retailer’s multiple channels (Piotrowicz & Cuthbertson, 2014; Verhoef, Kannan,
& Inman, 2015). Therefore, the interest of retailers and scholars has turned from measuring individual channel performance—multi-channel retailing—towards the integration of offline and online channels, which is referred to as ‘omnichan- nel retailing’ (Herhausen, Binder, Schoegela, & Herrmann, 2015). In omnichannel retailing, retailers combine multiple online (digital) and offline (physical) chan- nels in a convergent manner to provide a unified customer experience during the purchase process (see e.g. Herhausen et al., 2015; Verhoef et al., 2015).
Customer experience, by definition, is a customer’s overall internal and subjective responses to a series of interactions with an organisation (Gentile, Spiller, & Noci, 2007; Meyer & Schwager, 2007; Schmitt, Brakus, & Zarantello, 2015) or a process, where customers construct experiences by merging services in their own lives’ processes (see e.g. Heinonen et al., 2010; Heinonen, Strandvik,
& Voima, 2013; McColl-Kennedy et al., 2015; Tax, McCutcheon, & Wilkinson, 2014). While rooted in psychology and philosophy, the theory of customer expe- rience stems back from the idea of hedonistic consumers seeking feelings, fanta- sies and fun while shopping (Holbrook & Hirschman, 1982), and it is linked to the paradigm of the ‘Experience Economy’, where experiences are commodified to provide customer satisfaction (see Pine & Gilmore, 1998, 1999). Prior studies have shown that a satisfying omnichannel experience may lead to increasing pur- chases and stronger customer loyalty due to increased interaction with customers and customers’ having an active role (see Verhoef et al., 2015). This integration may augment the retail offering and enable customers to achieve their shopping goals more efficiently and effortlessly (e.g. Kumar & Venkatesan, 2005; Verhoef et al., 2015; Wallace et al., 2004). Yet, empirical evidence on the success of omni- channel retail concepts is rather scarce because many firms have been unable to provide a ‘seamless omnichannel experience’ (Herhausen et al., 2015). The prior literature argues that the challenge in providing an exceptional omnichannel ex- perience is mapping out customers’ unique paths-to-purchase processes through multiple touchpoints1 (cf. e.g. Ailawadi & Farris, 2017; Herhausen et al., 2015;
Lemon & Verhoef, 2016).
Even though technological change has created new digital channels, the consumer purchase process has been affected by multiple channels and touch- points for decades (e.g. print, radio, in-store, television, billboard, catalogue and direct selling). However, the core experience of shopping within a retail store was
1 A touchpoint refers to any point of customer interaction in a customer’s path to pur- chase (Meyer & Schwager, 2007). These touchpoints include many encounters that are relevant to service (i.e. ’moments of truth‘ that affect customer outcomes, such as purchase, patronage and endorsement) (Voorhees et al., 2017).
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not dispersed between multiple channels before the emergence of electronic re- tailing. In this multiple channel retail context, customer experience is constructed through interactions across myriad touchpoints (Lemon & Verhoef, 2016;
Verhoef et al., 2009). The dispersion of consumer behaviour between B&M and online store (e-store) environments has caused re-examination of the ambient condition, the spatial layout and the signs, symbols and artefacts of a store’s set- ting as well the level of social interaction with other customers and/or service personnel due to the joint effects of the physical and digital retail environments (see Ballantyne & Nilsson, 2017; Piotrowicz & Cuthbertson, 2014). The combina- tion of these factors is conceptually defined as the servicescape (Bitner, 1992, Tombs & McColl-Kennedy, 2003).
Regardless of the intangible nature of online retailing, many sensory attrib- utes of the physical servicescape are metaphorically maintained when conceptu- alising digital retail environments and virtual interactions (Ballantyne & Nilsson, 2017). For example, a website’s design will affect the atmosphere of an e-store similarly to how the interior shapes the atmosphere of a B&M store. Moreover, the customer experience in the servicescape has become more social in nature because social media platforms have increased customer-to-customer interac- tions (Lemon & Verhoef, 2016). Hence, customers may share their experiences as well as become influenced by peer customers during a service encounter (Leeflang et al., 2014; Lemon & Verhoef, 2016; Libai et al., 2010). Mobile technol- ogy has brought this peer culture into the B&M channel, with customers com- municating about their service experiences with their wide social networks via portable devices in real time (Piotrowicz & Cuthbertson, 2014). Hereby, customer experience can be regarded as three dimensional, consisting of converging digital, physical and social realms (Bolton et al., 2018). Notably, the prior literature fo- cused on only one or two realms (Bolton et al., 2018), and customer experience models were initially developed separately in either the offline context (e.g.
Shilpa & Rajnish, 2013), the online context (e.g. Rose, Clark, Samouel, & Hair, 2012) or to measure and compare the effects of individual channels separately (e.g. Van Birgelen, De Jong, & de Ruyter, 2006; Wang, Jiang, & Chen, 2004). Un- derstanding interconnections between digital, physical and social realms may help create sophisticated service systems that benefit consumers, organisations and society (Bolton et al., 2018). Therefore, better knowledge of how the three realms of the servicescape could converge is needed to co-create a superior cus- tomer experience.
While the social nature of the servicescape is widely recognised (e.g.
McColl-Kennedy et al., 2015; Rosenbaum & Massiah, 2011), the research on how customers and service personnel create trust and reciprocal relationships through the physical, digital and social realms of the servicescape is scarce. Cus- tomers’ participation affects the essence of the service encounter; because service experiences are co-created through interactions among customers and/or be- tween customers and retailer. Briefly, the term ‘co-creation’ is defined as multiple actors creating value in collaboration through the exchange and integration of resources (Jaakkola, Helkkula, & Stenroos, 2015). Moreover, as depicted earlier,
social interaction itself is among the motives for customers to visit retail stores (e.g. Piotrowicz & Cuthbertson, 2014; Landry et al., 2005; Maruyama & Wu, 2014;
Novak et al., 2003; Pan & Zinkhan, 2006; Verhoef, Neslin, & Vroomen, 2007; Wil- mott & Nelson, 2003; Yeoman et al., 2005). In addition, interpersonal relation- ships and social networks that are supported by digital and/or physical services- capes may provide retailers with a competitive advantage because they are more difficult to replicate than product- or market-related factors.
This dissertation examines interpersonal relationships, social networks and customers’ involvement in relation to the customer experience. In the literature, these phenomena are known as social capital, which is part of sociological theory (see Bourdieu 1983/1986; 1980, as cited in Lin, 1999; Coleman 1988, 1990; Putnam, 1993, 1995), within which it is defined as investment in social relations with ex- pected returns (see Lin, 1999) or further connections among individuals, includ- ing social networks and the norms of reciprocity and trustworthiness that arise from them (see Putnam, 2000). In the retailing context, social capital is examined as reciprocal actions between customers and retailers that represent both inter- personal and institutional levels of reciprocity (Miller, 2001) (i.e. networks and relationships among customers as well as between customers and a retailer and its personnel). Studying customer experience in relation to social capital is crucial because dispersion of the servicescape between online and offline stores has al- tered how people interact in the digital–physical service environment and how that affects the shopping experience. In addition, it is important to understand how a customer’s experience in the retail environment constitutes social ties be- tween the customer and service personnel. These social ties may engender inter- personal relationships that could become a source of customer loyalty towards the retailer. In digitalised commerce, customer loyalty has become more difficult to obtain due to the ease with which customers can switch to another retailer.
Therefore, managing the specific servicescape factors that affect social capital can help retailers with multiple channels stand out from their competitors through developing stronger relationship with their customers. Based on these back- grounds, the aims of the study and the research questions are proposed below.
1.2 Aims of the Study and the Research Questions
This dissertation contributes to the theory of customer experience by examining it through the theory of social capital and servicescapes (i.e. how interpersonal relationships and social networks are formed in retail stores that comprise digital and physical channels) (Figure 1). The customer experience as a response to ser- vice is widely discussed in the marketing literature. The origin of the concept of experience can be traced to psychology (Deshwal, 2016). Recently, it has espe- cially been discussed in the context of digital marketing because new online chan- nels have dispersed the customer experience between multiple channels (see e.g.
Verhoef et al., 2009; Verhoef et al., 2015). The service literature examines cus-
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tomer experience creation as an interactive process that takes a place in the phys- ical and digital spaces of the retailer, which comprise what is defined as the ser- vicescape (see e.g. Ballantyne & Nilsson, 2017; Bitner, 1992; Tombs & McColl- Kennedy, 2003). Social capital is a sociological theory (see e.g. Bourdieu 1983/1986; 1980, as cited in Lin, 1999; Coleman 1988, 1990; Putnam, 1993, 1995) that is applied in retail research when examining networks and interpersonal re- lationships as well as trust and reciprocity (Miller, 2001).
FIGURE 1 Theoretical Positioning of the Dissertation
As described earlier, increased competition and easy interchangeability of retail- ers have weakened customer loyalty; therefore, seemingly rational factors and economic norms have been emphasised in digitalised retailing (see Srinivasan et al., 2002; Wallace et al., 2004). However, contradictory prior studies have shown that various social factors as well as the seeking of experiences and authenticity influence consumer behaviour (see Maruyama & Wu, 2014; Novak et al., 2003;
Wilmott & Nelson, 2003; Yeoman et al., 2005); hence, social ties and customer communities may provide surplus value for customers. Previous studies have primarily focused on product-relevant (i.e. product quality, price), market-rele- vant (i.e. convenience, service quality) and personal factors (i.e. demographics, attitude towards a store) (see e.g. Pan & Zinkhan, 2006).
In addition, there is still limited evidence on how elements from the digital, social and physical realms of the servicescape can be combined to facilitate the customer experience (Bolton et al., 2018). As depicted earlier, prior research has either focused on examining customer experience formation on a single channel
Customer experience Marketing, Psychlogy
Servicescape Marketing,
Service literature
The positioning of
this dissertation
Social capital Sociology
or has emphasised the consistency of service elements. As a result, further re- search is needed on connectivity across the digital, physical and social realms of the servicescape regarding how customers may actively participate in experience creation to achieve their goals (Bolton et al., 2018).
More research on customer experience measurement is also required due to a lack of strong existing scales to measure customer experience (Lemon &
Verhoef, 2016); thus, customer experience should be examined in relation to ex- isting, more established marketing constructs, such as customer loyalty, to un- derstand the antecedents and outcomes of the customer experience. There is no empirical evidence to date on how these realms of the servicescape are connected to outcomes that manifest social capital, such as trust or advocacy, towards the retailer. Moreover, from the practitioners’ perspective, this metric’s development for customer experience in the digital–physical servicescape is critical because models influence the expected effects of marketing actions (Ailawadi & Farris, 2017). To address these research gaps, this research firstly investigates the stand- point of social capital in retailing
As such, the main research question is as follows:
How is social capital created within the customer experience in the digital–
physical retail servicescape?
This main research question is addressed though the following sub-questions:
RQ1 Why are social- and community-based factors important in retailing?
RQ2 How is social capital related to customer experience in the digital–physical servicescape?
RQ3 How are elements from the digital, social and physical realms of the servicescape associated with customers’ relationships with the retailer?
The answer to the main research question was sought through these sub-questions, of which each was studied within its own research phase. The research process and the descriptions of each research phase are presented in the following sections 1.3 and 1.4. The findings of each research phase were presented in separate publi- cations, which are included as original Papers I–III in this dissertation.
1.3 The Research Process and the Study’s Outline
To both describe how social capital emerges and explain how it affects customer relationship in the digital–physical servicescape, three sequential studies were conducted in individual phases (Figure 2). The findings of these studies are pub- lished in three original papers that are compiled in this dissertation (Table 1).The
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idea for this dissertation stemmed from a study that examined how social factors affect consumers’ store patronage. The first survey data (n = 1,504) used in this study were collected as part of the research project ‘Rural stores as user interfaces for private and public services’, which was conducted at Jyväskylä University School of Business and Economics (JSBE) and funded by the European Agricul- tural Fund for Rural Development (EAFRD) (European Union). This study ex- amined the purpose of local stores in rural communities in response to ongoing digital disruptions due to commerce and the urbanisation of European societies.
Interestingly, the findings of the survey contrasted the prior literature that had supported economic norms (value price, convenience) as dominant factors for explaining retail patronage by showing the importance of social ties and the need for human contact. This study became the peer-reviewed journal article ‘The im- pact of consumer local engagement on local store patronage and customer satis- faction’, which was published in The International Review of Retail, Distribution and Consumer Research (IRRDCR) and is included as Paper I in this dissertation.
TABLE 1 The Author’s Contribution in Individual Papers in this Dissertation Publication/Manuscript Research
Problem and Literature
Research Design
and Data Data Analysis, Results and Writing Paper 1. The Impact of
Consumer Local Engagement on Local Store Patronage and Customer Satisfaction (Article published in IRRDCR)
The author shared
responsibility for initiating the paper and developing the conceptual model and survey design with his co-authors.
The author shared
responsibility for survey design with his co- authors. The data were collected by a marketing research company.
The author was responsible for data analysis and writing the methodology, results and managerial implications.
Paper 2. How does the Digitalization of Servicescape Shape the Service
Experience?
(Chapter accepted for a textbook published by Oxford University Press)
The author was responsible for initiating the paper.
The author was responsible for planning and conducting focus groups
interviews.
Interviewees were recruited from the personal networks of students.
The author shared responsibility for analysing the data and writing the paper with the co- author.
Paper 3. Omnichannel Customer Experience:
Testing the Interplay between Digital and Physical
Servicescape Determinants (Manuscript)
The author was responsible for initiating the paper and developing the framework.
The author was responsible for the survey design. The data were collected by a marketing research company.
The author shared responsibility for writing the paper with the co- authors. He was responsible all data analysis.
Although Paper I emphasised the role of social factors in retail shopping, the study failed to examine either how social capital is created in the shopping experience or the impact of digitalisation on social capital in retail. To further understand the role of social capital in retail commerce, the work continued in the context of digital retailing as part of a research project for the JSBE, which was funded by Business Finland (previously Tekes) in association with the Ox- ford Institute of Retail Management at the University of Oxford’s Saïd Business School and Aalto University School of Business. The project ‘Red Queen effect–
Strategies for an innovative landscape’, which was named after the novel by Lewis Carroll (1871; cf. Barnett & Hansen, 1996), examined how organisations in retail both shape and adapt to the disruption caused by online commerce. The Red Queen’s race is an effective metaphor to describe the need for retailers to continuously develop their business to respond to the disruptive challenges that are created by the emergence of online retailing. In the novel by Carrol the pro- tagonist named Alice notices that she appears to be stationary even though she is running a race. The Red Queen's response is that if Alice wants to get some- where else, she must run at least twice as fast, since in a fast world one must run just to stay still (Carroll, 1871 in Barnett & Hansen, 1996, p.140). The topic of this dissertation explores the same problem by examining how digitalisation of the servicescape has affected both the shopping experience and social capital in retail.
The first survey study illustrated the standpoint and behavioural conse- quences of social capital in the context of grocery retail, but further descriptive research was needed on how social capital is facilitated by the customer experi- ence in retail stores. Therefore, in phase two, focus group consumer interviews with omnichannel consumers were conducted to study how human contact and the setting (regarding social interaction) are experienced in digitalised retailing.
The findings illustrated how customer experiences were formed through human contact and sensorial clues across online and offline stores and how trust and reciprocal relationships were connected, especially to meaningful emotional ex- periences. A second consumer survey (n = 880) was conducted to examine how the servicescape’s elements were linked to social capital outcomes through as- pects of the customer experience. The findings of these studies are presented in papers II and III, which are included in this dissertation. Paper II is a book chapter (‘How does the digitalisation of servicescape shape the service experience?’), which has been accepted for a textbook published by the Oxford University Press.
Paper III—the manuscript ‘Omnichannel customer experience: Testing the inter- play between digital and physical servicescape determinants’—has been sent to an academic journal for peer review.
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FIGURE 2 Phases of the Study
The structure of the dissertation is illustrated in Table 2. This set of publications is based on examination of prior literature to determine the impact of digitalisa- tion on the retail servicescape and to draw the theoretical framework, which is illustrated at the end of the next chapter (see Figure 4). The purpose of the frame- work is to highlight the research gap by conceptualising the servicescape in rela- tion to social capital based on prior literature. A literature review is firstly used to conceptualise the customer experience in the servicescape in relation to social capital, followed by a description of the research design, summaries of the three original papers and finally a conclusion and discussion of the findings, including an evaluation of the research and suggestions for future study.
Phase One
Purpose: Explaining social relatioships in retail (Paper I) and regcognising the need for further research
Instrument: Consumer survey (n = 1,500)
Research project: 'Rural stores as user interfaces for private and public services' (EAFRD/EU)
Phase Two
Purpose: Describing social capital formation in the digitalised retail servicescape (Paper II) and supporting the
framework/hypotheses development Instrument: Focus groups
Research project: 'Red Queen effect–Strategies for an innovative landscape' (Business Finland)
Phase Three
Purpose: Explaining the digital–physical servicescape antecedents for social capital outcomes (Paper III) and complemening the qualitative study
Instrument: Consumer survey (n = 880)
Research project: 'Red Queen effect–Strategies for an innovative landscape' (Business Finland)
TABLE 2 The Research Structure Research
question How is social capital created in the retail servicescape, which com- prises both digital and physical channels?
Publications Paper I Paper II Paper III Title ‘The impact of con-
sumer local engage- ment on local store patronage and cus- tomer satisfaction’
‘How does the digitali- sation of servicescape shape the service expe- rience?’
‘Omnichannel cus- tomer experience:
Testing the interplay between digital and physical servicescape determinants’
Sub-
question RQ1 RQ2 RQ3
Study focus The standpoint of so- cial capital in
retailing
Congruence of the digi- tal, physical and social realms of the services- cape
The digital–physical servicescape’s anteced- ents and outcomes of customer experience Instrument Consumer survey Consumer focus
groups
Consumer survey Findings In contrast to the
prior literature that supported economic norms as dominant factors explaining re- tail patronage, the study emphasised the importance of so- cial ties and the need for human contact.
Consumers form their experiences by inter- preting elements from the digital, social and physical realms of the servicescape. Online–
offline integration facil- itates the co-creation of service experiences among people in the servicescape.
The effects of both the digital and physical servicescapes on both the affective and the cognitive experiential state are enhanced by perceived channel in- tegration. The experi- ential states are related to loyalty behaviours across channels.
Conclusions I) Retail stores serve as a setting for networks of non-commercial exchange, and social interaction can be an end in itself while visiting retail stores.
II) The combination of online and offline stores facilitates social capital formation by providing a platform for a broader variety of human contact and social networks than a single channel could offer. In this digital–physical servicescape, channel integration enhances the co- creation of the service experience by providing convenient access to these social resources.
II) The affective state of the service experience is especially associated with trust and commitment towards the relationship with the retailer.
2.1 The Customer Experience
2.1.1 The Concept of the Customer Experience
Customer experience is often defined as a customer’s internal and subjective re- sponses to and/or interpretation of a series of interactions with an organisa- tion/product/brand (process to purchase or use) or through imagination or memory (Gentile et al., 2007; Jaakkola et al., 2015; Meyer & Schwager, 2007;
Schmitt et al., 2015). Customer experience includes how a customer thinks or feels about the company (see Meyer & Schwager, 2007). The result of the customer experience is the formation of a highly personal impression, which is stored in the customer’s long-term memory (Carbone & Haeckel, 1994). This impression has been shown to enhance hedonic buying behaviour and to reduce customers’
price sensitivity or seemingly rational comparison of alternatives (Roggeveen, Grewal, Townsend, & Krishnan, 2015). Besides this stimulus- based perspective, an interaction based view has been applied when studying customer experience (Lipkin, 2016). In the interaction-based view, customer experience is examined as a process wherein customers construct experiences by merging services within their own life processes (see Heinonen et al., 2010; Heinonen et al., 2013; McColl- Kennedy et al., 2015; Tax et al., 2014). To obtain a holistic view of the customer experience, both approaches should be considered. Therefore, the customer ex- perience as a response is discussed here, while construction of the customer ex- perience is examined in the context of the servicescape in the section 2.2.2.
The design of the physical as well as the digital shopping environments is vital to managing encounters between retailers and consumers (see Pecoraro &
Uusitalo, 2014). To understand this interaction, it is crucial to firstly examine the customer experience in the service context. Its evaluation depends on the com-
2 THEORETICAL FOUNDATIONS
parison between a customer’s expectations and the stimuli coming from interac- tions with the company, along with the moments of truth, through various touch- points (Gentile et al., 2007). These expectations are evidently affected by prior customer experiences with the firm or its competitors (Lemon & Verhoef, 2016).
Earlier studies have focused on the elements of the customer experience that re- tailers can control, such as service interface, retail atmosphere, assortment, price and personnel (e.g. Baker, Parasurman, Grewal, & Voss, 2002; Naylor, Kleiser, Baker, & Yorkston, 2008). However, the more recent holistic definition also in- cludes elements that are outside the retailer’s control (Verhoef et al., 2009), in- cluding consumers’ moderators (e.g. shopping goals, demographics and other consumer attributes, such as price sensitivity), situational moderators (e.g. type of store, culture, location, economic climate, competitors) and the influence of other consumers (Verhoef et al., 2009). The presence of other customers in the shopping environment (e.g. crowding, coexistence, togetherness, interpersonal relations) already shapes the customer experience, but digitalisation has also in- creased the role of reviews and advice from other consumers as well as the im- portance of customer communities (see Piotrowicz & Cuthbertson, 2014; Leeflang et al., 2014; Lemon & Verhoef, 2016). Thus, considering factors outside a retailer’s control is crucial while studying shopping environments in which other custom- ers are digitally or physically present in the service encounter.
The conceptualisation of experience has varied in the marketing literature (Table 3), which initially established the idea of a ‘consumption experience’ while acknowledging the emotional and hedonic aspects of consumption (see Holbrook & Hirschman, 1982). The terms ‘marketing experience’ (see Gilmore &
Pine, 2002) and ‘commercial experience’ (see Poulsson & Kale, 2004) have been used when discussing experiences as commodities, while ‘brand experience’ re- fers to how an overall brand is experienced by customers (see Brakus, Schmitt, &
Zarantonello, 2009). In addition, ‘experience quality’ refers to the customer’s emotional judgment about an entire experience (see Chang & Horng, 2010). The terms ‘total customer experience’ (see Mascarenhas, Kesavan, & Bernacchi, 2006) and ‘perfect customer experience’ (see Frow & Payne, 2007) are used in the cus- tomer experience management literature to describe when delivering ‘outstand- ing’ overall customer experience to sustain lasting customer loyalty. Hence, it can be concluded that how customer experience is characterised is based on the re- search context (Table 3). The customer experience in the retail environment con- text, which is the focus of this study, is referred to in the literature as the ‘service experience’ (see Berry, Lewis, & Haeckel, 2002; Carbone & Haeckel, 1994); how- ever, the concepts of the customer experience and the ‘service experience’ are of- ten used synonymously.
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TABLE 3 The Main Conceptualisations of the Customer Experience
Conceptualisation Definition Key Literature
Consumption experience Pleasure drawn from usage of a product
Holbrook & Hirschman, 1982
Marketing—or commercial—
experience Marketing experience as a
commodity Gilmore & Pine, 2002;
Poulsson & Kale, 2004 Brand experience Overall experience of a
retail store or a product brand
Brakus, Schmitt, &
Zarantonello, 2009 Experience quality The customer’s emotional
judgment about an entire experience
Chang & Horng, 2010
Total—or perfect—
customer experience
‘Outstanding’ experience that enhances long-lasting customer loyalty
Frow & Payne, 2007;
Mascarenhas et al., 2006 Service experience Experience characterised by
the central role of people who are involved in the service encounter
McColl-Kennedy et al., 2015; Tax et al., 2013
Online consumer, shopper or service experience
Experience that occurs in a digital channel via either the single- or the
multichannel approach
Ahmad, 2002;
Klaus, 2013; Liao & Keng, 2013
B&M or in-store customer experience
Experience that occurs in the B&M shop via either the single- or multichannel approach
Blázquez, 2014;
Bustamante & Rubio, 2017
Omnichannel customer
experience Experience is formed
through synergies of service elements between digital and physical channels
Rigby, 2011;
Verhoef et al., 2015
2.1.2 A Multidimensional View of the Customer Experience
Because the customer experience consists of one’s personal feelings and thoughts about the company or its products or brand, it can be divided into the affective and cognitive experiential states (Mosteller, Donthu, & Eroglu, 2014; Rose, Hair,
& Clark, 2011) or utilitarian and hedonic experiences, respectively (e.g., Lim, 2014). These two conceptualisations are consistent because, while utilitarian/in- strumental and task/functionality factors are cognitive, hedonic/affective factors are emotional in nature. Compared to the initial predominantly cognitive defini- tion of shopping (see Hoffman & Novak, 1995), the two-dimensional conceptual- isation provides a more balanced approach. This also means that shopping is not only a means to obtain needed products but for the emotional nature of the ex- perience, including fun and enjoyment (Babin, Darden, & Griffin, 1994; Holbrook
& Hirschman, 1982). Thus, both utilitarian and hedonic motivations are central
antecedents of shopping (see Arnold & Reynolds, 2003), and these two psycho- logical constructs of cognition and affect have been consistently identified as in- fluential elements of customer experience in both the marketing and the retailing literature (see Arnold & Reynolds, 2003; Bagozzi, Gopinath, & Nyer, 1999; Frow
& Payne, 2007; Rose et al., 2011) and included in customer experience models (see Verhoef, 2009). The notion that both cognition and psychosomatic factors affect consumer behaviour also corresponds to classical decision-making theories (Hoffman & Novak, 2009; Holbrook & Hirschman, 1982, p. 132; Novak et al., 2003;
Novak, Hoffman, & Yung, 2000). Acknowledging the emotional nature of cus- tomer experience is crucial for the study of customer experience in the retail–
service context because the dispersion of shopping behaviour between online and B&M stores has not only affected the utilitarian factors (e.g. assortment, ac- cessibility) but also how emotions are formed in social interactions across both digital and physical shopping environments.
In addition to the affective and cognitive experiential states, different levels of involvement from consumers may relate to customer experience (e.g. Gentile et al., 2007; Meyer & Schwager, 2007; Schmitt et al., 2015). Conceptualisation of the elementary components of experience has varied, per the field of study or the research purpose. Psychological, behavioural and neurophysiological studies have acknowledged sensorial responses alongside affection and cognition (Gen- tile et al., 2007). In addition, behavioural and social responses that are related to retail stimuli have been acknowledged in studies on brand personalities (see Brakus et al., 2009). Different sets of components have been utilised in different studies, such as flow2 experience in the pure online context (e.g. Hoffman & No- vak, 1995; Lim, 2014) or experiential value dimensions while studying the bene- fits that are derived from customer experience (Mathwick, Malthora, & Rigdon, 2001). However, the five experiential responses affective/emotional, cogni- tive/utilitarian, sensory, behavioural and social/relational (Table 4) have reoc- curred in multiple recent frameworks for customer experience with somewhat consistent conceptualisations (e.g. Lemon & Verhoef, 2016; Schmitt, 2011;
Verhoef et al., 2009).
In summary: 1) affective/emotional experience refers to an affective rela- tionship with the company that involves an individual’s affective system through the engendering of moods, feelings and emotions as well as seeking fun and en- joyment from consumption; 2) cognitive/intellectual/utilitarian experience is connected with thinking and conscious mental processes as well as using one’s creativity in situations of problem solving or to meet shopping goals; 3) sensorial experience refers to reactions to stimuli that affect the senses (sight, hearing, touch, taste and smell) and thus may arouse aesthetic pleasure, excitement, sat- isfaction or a sense of beauty; 4) behavioural experiences refer to actions and
2 Flow experience is a method of capturing the facilitating immersive online experi- ence, which in turn results in the attainment of online marketing objectives (Hoffman
& Novak, 1996). Derived from the theory of psychology, flow is defined as the men- tal state of operation in which a person performing an activity is completely im- mersed in a feeling of energised focus, full involvement and enjoyment in the activ- ity’s process (Hossain, Zhou, & Rahman, 2018).
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physiological reactions when interacting with a company or its brand or products;
and 5) social/relational experience is associated with feelings of togetherness with other people and a sense of belonging or of distinction from a social group (social affirmation).
TABLE 4 The Main Dimensions of the Customer Experience Dimension Definition
Affective/Emotional An affective relation with the company, which involves one’s affective system through the generation of moods, feelings and emotions; seeking positive emotions from consumption
Cognitive/Utilitarian Connected with thinking and conscious mental processes; using creativity or in situations of problem solving; meeting shopping goals
Sensorial Reactions to stimuli that affect the senses (sight, hearing, touch, taste and smell) and thus arouse aesthetic pleasure, excitement, satisfaction or a sense of beauty
Behavioural Actions and physiological reactions when interacting with a company or its brand or products
Social/Relational A feeling of togetherness with other people; a sense of belonging or of distinction from a social group (social affirmation)
2.1.3 From the Single-Channel to the Omnichannel Experience
The customer experience may also be characterised according to the relevant channel’s context. In online retailing, it is referred to by many terms, such as the online consumer experience (see Liao & Keng, 2013), the online shopping expe- rience (see Ahmad, 2002), or the online service experience (see Klaus, 2013). By contrast, the customer experience that occurs in a physical (or offline) store is referred to as a B&M customer experience (see Blázquez, 2014) or an in-store cus- tomer experience (Bustamante & Rubio, 2017). These definitions involve the no- tion of studying the customer experience in either a single-channel or a multi- channel setting (i.e. comparing the effects of individual channels or examining the consistency of service elements between channels). Conversely, the more re- cent notion of an ‘omnichannel experience’ focuses on synergies between chan- nels (see Rigby, 2011; Verhoef et al., 2015). An omnichannel experience occurs when a customer interacts with a retailer through touchpoints in multiple chan- nels, which the customer often utilises simultaneously (i.e., a physical store and digital channels, such as websites, social media, mobile and in-store technologies).
In essence, the term ‘omnichannel marketing’ can be regarded as multichannel marketing, wherein the entirety of the channels is considered instead of focusing on the performance of individual channels. The integration of multiple channels characterises the omnichannel customer experience. Multi- or cross-channel inte- gration is defined as having mutual support and interchangeability between online and offline channels (Chiu, Hsieh, Roanc, Tseng, & Hsieh, 2011). This re- fers to integrated information, customer service and channel access. As a result,
a seamless experience occurs across channels through integration, which may create a stronger customer experience through synergies of the advantages of both online and offline channels (Lemon & Verhoef, 2016). Development from a single- or multichannel to an omnichannel conceptualisation is central for the study of the service experience because both the shopping environment and in- teractions within it are dispersed between the digital and physical channels.
Moreover, prior literature has emphasised further research is needed on how synergies between digital and physical channels as well as human interactions within them facilitate customer experience (see Bolton et al., 2018).
2.1.4 The Customer Experience as a Sequence of Events
The customer experience is also a sequence of events that crosses the three stages to the remembered experience (Figure 3) (Arnould, Price, & Zinkhan, 2004;
Lemon & Verhoef, 2016; Tynan & McKechnie, 2009): 1) pre-experience covers all aspects of the customer’s interaction with the brand, category and environment from the beginning of the need/goal recognition or impulse to consideration of how to fulfil that need, goal or impulse with a purchase; 2) core experience en- compasses all customer interactions with the brand and its environment during the purchase/shopping event itself and is defined by specific behaviours, such as choice, ordering and payment; and 3) post-experience covers customer inter- actions with the brand and its environment after the actual purchase, such as us- age and consumption, post-purchase engagement and service requests (Lemon
& Verhoef, 2016; Meyer & Schwager, 2007).
Both direct and indirect contacts with the company at various touchpoints affect customer experience throughout this entire process. Direct contact with the company generally occurs in the course of the purchase, use and service, and it is usually initiated by the customer, while indirect contact often involves un- planned encounters with representatives of a company’s products, services or brands and takes certain forms, such as word-of-mouth3 (WOM) communication, advertisement, news reports and reviews (Meyer & Schwager, 2007).
These indirect and direct contacts occur in touchpoints that are both inside and outside the company’s control. Company-controlled touchpoints encompass the company’s and its partners own marketing communication and other com- pany-controlled elements of the marketing mix, such as pricing, personnel, as- sortment and distribution channels (Lemon & Verhoef, 2016). Touchpoints that are outside the company’s control include a customer’s choice of payment, how one uses or communicates about the products and store space as well as the in- fluence of other third-party sources (e.g. media and other customers) (Lemon &
Verhoef, 2016). Due to a lack of understanding about the complex omnichannel journey through the stages of the customer experience, there is a demand for
3 WOM means any evaluation, with either a positive or a negative valence, about a company or its product or brand that is shared among actual, potential or former customers. The definition includes ‘online WOM’, which is when the same type of information is shared among numerous people and institutions via the Internet (see Hennig-Thurau, Gwinner, Walsh, & Gremier, 2004).
